Good afternoon, everyone. Welcome to Superior Group of Companies 2020 Fourth Quarter and Year End Earnings Conference Call. With us today on behalf of the company is Michael Benstock, the company's Chief Executive Officer; Andy Demott, its Chief Operating Officer, Chief Financial Officer and Treasurer; and from the Promotional Products Division we have Jake Himelstein, BAMKO’s Chief Operating Officer and CFO. As always, upon the conclusion of the company’s remarks there will be a question-and-answer session. This call is being recorded, and your participation implies that you agree to this. If you don’t, then simply drop off the line.

Thank you. This conference call may contain forward-looking statements about Superior Group of Companies, the company within the meaning of Securities Act of 1933, the Securities Exchange Act of 1935, the Private Securities Litigation Reform Act of 1995 and all rules and regulations issues there under. Such statements are based upon management current expectations, projections, estimates and assumptions. Words such as will, expect, believe, anticipate, think, outlook, hope and variations of such words and similar expressions identify such forward-looking statements, which includes statements on the impact of COVID-19 on the company's business, including inventory, supply chain, manufacturing capacity at the company's own and contract manufacturing facilities, service capacity and customer demand. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. Such risks and uncertainties include, but are not limited to the following: the effect of the COVID-19 crisis on the U.S. and global markets, our business operations, customers, suppliers and employees, general economic conditions in the areas of the United States in which the company's customers are located, changes in the markets where uniforms are worn, where promotional products are sold and where call center services are used, the impact of competition, the company's ability to successfully integrate operations following confirmation of acquisitions and the availability of manufacturing materials, as well as the risks and uncertainties disclosed on the company's periodic filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the year ended December 31, 2019, and the 8-K filed recently. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements contained herein to conform to actual results or changes in the company's expectations, whether as a result of new information, future events or otherwise, except as required by law. Please note that all growth comparisons that management makes today will relate to the corresponding period in 2019, unless otherwise noted.

Thank you, Hala and welcome everybody. Good afternoon. Thank you for joining us to discuss our fourth quarter results. With me today as usual is Andy who will report on the overall SGC results and status of our operations and Jake will report today on BAMKO’s financials and the state of our current operations there. Jake previously helped lead the third quarter earnings call when Andy was not able to attend. As BAMKO becomes a larger part of our company, we feel that the addition of Jake to speak to BAMKO’s results and answer questions is helpful. As usual, when we are done, we'll be open for questions. So let's get started. I am extremely proud to have reported our results this morning. Record results in all segments and significant increases in top and bottom line results is positive news for our shareholders. I'm especially proud to have done so in one of the most trying years in our 100-year history, reporting on how we pivoted and brought even greater shareholder value than ever. To remind you, 2020 marked the 100th anniversary of the founding of this company. My great grandmother Rose started this business on the heels of the Spanish flu pandemic entering us into the world of medical apparel in 1920. She was a bold woman. Only after she started the company was she even given the right to vote. She was a trailblazer. I have been preceded by many bold leaders: my grandfather, David Benstock, who saw the company through World War II and the support we gave to our armed troops during that time; and my father who diversified the company greatly in the uniform sphere and took the company public in 1968. Our legacy of 100 years is phenomenal and to have ended our 100 years in the midst of a pandemic, with the level of success we have achieved, gives us certain bragging rights. I mostly don't want to brag about our 4,600 associates, who’ve worked harder and smarter with so little clarity as to what was going to happen this past year. They fought for our survival and not only did they succeed, but they exceeded beyond all of our expectations. Our work-from-home solution was deployed in mid-March across all countries that we operate in. None of us knew at that point what the future would hold nor what the contingency plans we had put in place to sell PPE and to heighten our focus on essential customers would yield in terms of our level of success. As countries shut down, we benefited greatly from our long-term strategy of redundant manufacturing, moving production around the world like chess pieces to ensure continuity of supply. In keeping with our legacy, we also made record donations last year, millions of dollars in cash donations and essential products to healthcare systems. Our donations helped support over 100,000 caregivers. The full value of our donations well exceeded $5 million. Charity is in our DNA. It always has been, going back to our formation in 1920. Our business got started as an act of charity when my great grandmother Rose helped three fellow immigrants get our business started as Superior Surgical.

Thank you, Michael, and good afternoon, everyone. I'm ecstatic with the results our team at BAMKO has delivered during such a challenging year. Our presence on the ground in Asia and our Superior Sourcing prowess distinguished us during a year marked by crisis and opportunity. BAMKO ended the fourth quarter with sales of $56.3 million, a 52.5% increase from Q4 2019. Operating margin improved to 14.6% compared to 4.5% in last year's fourth quarter. For the full year 2020, our sales were greater than $202 million, an increase of approximately 88% over 2019. We leveraged our scale to deliver a 13% operating margin compared to a 4.3% operating margin in 2019. This massive increase in operating margin is a testament to BAMKO’s ability to realize economies of scale as we continue on our growth trajectory. Industry-wide promotional product spend was down approximately 25% to 30% in 2020 compared to 2019. Despite these powerful industry headwinds, BAMKO’s core promotional product sales actually increased year-over-year by $11.9 million or 11.1%. In fact, the fourth quarter was the largest single quarter of promotional product sales in BAMKO’s history. To reemphasize, in a year where our industry was down upwards of 30%, BAMKO was up 88% overall year-over-year, and when stripping out PPE, BAMKO’s sales were still up 11% year-over-year. Just a remarkable performance in a very challenging market. Core promotional product sales were steady in the first three quarters of the year, before increasing substantially in Q4 as we saw a sharp increase in employee gifting. Our backlog at year end was $45.5 million, which consisted of $5.6 million in PPE and $39.9 million in non-PPE sales. While the total backlog figure is slightly lower than prior quarters, the non-PPE backlog continues to increase, showing a resurgence in promotional product spend. It's also the largest year-end backlog in BAMKO’s history. 2021 brings with it both challenges and opportunities regarding the promotional products market. A primary challenge is the timing of a return to large-scale conferences and events, something we are not expecting to occur until at least the second half of the year. Fortunately, BAMKO’s business is substantially less event-based than the industry as a whole. And BAMKO’s continued strong performance has it well positioned to meet renewed demand as these events return. A diversified portfolio of clients and industry sectors served by BAMKO includes a number of well-performing segments beyond the gig economy sector. These include other areas of strengths, such as home gifting, customer retention programs, customer acquisition, reacquisition programs, virtual conference gifts, and gift-with-purchase items for consumers. All told, BAMKO is much better prepared to take on the challenges and opportunities in the promotional products market than the industry at large. Our acquisition of Gifts By Design immediately positioned BAMKO to become an industry leader in corporate awards, incentives, and recognition programs, which we view as an important and rapidly growing market segment. We plan to leverage our large client base and sales force to extend this vertical to current and future clients. By joining forces, both companies will immediately become better with increased capabilities and product offerings. We are adding talent and proven leadership in a previously untapped vertical. Before I close, I'd like to point out that BAMKO was once again honored in 2020 by the Los Angeles Business Journal as the number one Medium-Sized company to work for in all of Los Angeles. Additionally, members of the BAMKO team recently won awards for salesperson of the year and best boss as selected by Promotional Products trade publications. These are quite impressive achievements, which reinforce our commitment to our culture and our people. I'll now turn the call over to Andy for his operational and financial review.

Thank you, Jake. Good afternoon, everyone. Our team performed at an exceptional level in the midst of unprecedented times and delivered four quarters of impressive results. Timely cost-cutting moves and an aggressive austerity strategy, in addition to profitable sales growth, allowed us to improve our cash flow for the year. We continue to improve our liquidity and debt leverage position, bringing our debt to EBITDA ratio to 1.4 times as of December 31, 2020, down from 4 times at the end of 2019. This highlights nearly a full year in which we are in line with our historically desired range of 1 to 2 times debt EBITDA and well under our covenant limit. For the year, we reduced outstanding debt by $31.6 million. We do our business through a long-term lens strategy for continuous improvement across our operational and financial platforms. As a matter of prudent corporate governance, we filed a universal shelf registration statement of $120 million on October 30, 2020. This gives us greater financial flexibility for acquisitions and large sales opportunities as they arise in the future. We also increased our revolving credit agreement by $15 million at very favorable terms and extended the maturity to 2026 to support our continued growth. During the year, we continued to make business process investments to greatly elevate our technology and automation, bolstering cross-functional collaboration and driving enhanced efficiencies and fulfillment capabilities. I'll briefly highlight some key accomplishments. We finalized the implementation of SAP in CID, completing critical software upgrades across our organization that further optimize our shared resources model. All of our uniforms segment businesses are now fully operational on SAP. We continue to expand our manufacturing presence in Haiti with more production being sourced from our own factories, giving us a distinct advantage over our competition. As we take a stronger position on fabric, we are able to reduce full package pricing. Overall, we expect nearly $300,000 in savings per month, beginning in the third quarter of this year on incoming product. This should translate into even more improved margins in 2022. We continue to make large investments in our distribution facilities in Arkansas and Dallas. We expanded our distribution facility in Eudora, Arkansas, and are in the midst of installing our new and upgraded robotics distribution. We expect to be operational with the new system later this year. Additionally, we are wrapping up the installation of robots in our distribution center at CID in Dallas now. We expect that these investments will help us continue to drive down distribution costs even further. We completed the sale of our HPI warehouse in Georgia in December of 2020, recognizing a gain on the sale of $2.2 million. The strategic consolidation of the Georgia and Arkansas facilities was completed late last year in accordance with our optimization efforts. Turning to our financial highlights, we had a tremendous finish to the year with fourth quarter net sales up 34.1% to $145.4 million. The largest contributor was BAMKO with a 52.5% quarterly sales growth that accounted for $56.3 million of the $145 million in sales. Uniforms or related products net sales increased 23.8% to $78.2 million relative to the comparable period in 2019. $24 million of that was PPE versus $841,000 in 2019. Jake reviewed BAMKO’s outstanding result, so I'll just reiterate that we continue to see significant operating margin leverage opportunities in the promotional products division as it continues to realize economies of scale. The Office Gurus returned to high double-digit growth and reported a net sales increase from third parties of 30.6% to $10.9 million. Throughout the year, the team redefined excellence in servicing existing customers, as well as onboarding new customers with their successful execution to meet changing customer needs. For the quarter, we reported consolidated gross margin defined as gross profit as a percentage of sales of 35.7% compared to 32.2% in the fourth quarter of 2019. This margin increase is attributable to higher margin sales based on product and customer mix. As a percent of net sales, consolidated SG&A expenses for the fourth quarter improved to 26% versus 27% last year, reflecting our ability to leverage higher volume sales across all business segments combined with continued cost mitigating actions to control operating expenses. Income from operations for the fourth quarter increased to $14.1 million and operating margins climbed from 5.2% to 9.7% over the same period. Overall fourth quarter net income increased almost 320% to $12.5 million or $0.79 per diluted share compared to $3 million or $0.20 per diluted share in last year’s fourth quarter. Now let's shift to review the full year results. On a year-over-year basis, net sales were up 40% to $526.7 million, clearly exceeding our guidance for the year. Uniforms net sales rose significantly by 21% to $287.3 million. Additionally, we ended the year with record backlogs for the uniform segment of $74.1 million in total compared to $15.4 million at the end of 2019. PPE backlog included in the 2020 year-end total was $36.7 million versus essentially zero at December 31, 2019. BAMKO closed on a record year, posting an increase of 88% and TOG posted an increase of 17.6%. Of note, our TOG facility in El Salvador experienced a shelter-in-place mandate at the end of Q1 with zero notice, which resulted in a loss of roughly $1.8 million in revenue while we deployed our work-from-home solution. TOG had zero layoffs due to the pandemic and continued to pay all employees who were willing to work as we deployed our work-from-home solution. As a percentage of net sales, consolidated SG&A improved to 25.9% for the year compared to 28.5% reported in 2019. Our ability to maintain cost discipline while leveraging higher sales volume across our business segments continues to drive improvements in SG&A percentages. We achieved the improvements noted in SG&A, despite potential bad debts in our accounts receivable balances, as we worked through budgeting and economic scenario planning, given continued uncertainty from pandemic related disruptions. To this end, we increased our provision for bad debt to $6.7 million in 2020, as compared to $1.3 million in 2019. We also incurred an increase in expense of $4.2 million on acquisition-related contingent liabilities, primarily driven by fair market value adjustments in these liabilities as a result of the tremendous operating results delivered by BAMKO and the Promotional Products segment. Our cost of goods sold were impacted by rising logistics costs, as Michael mentioned, impacting our uniform segment by more than $2 million. Despite this impact, overall gross margin increased to 35.8% as compared to 34.2% in 2019, primarily due to customer and product mix changes. Fiscal year 2020 operating income improved greatly to $52.3 million compared to $21.6 million in 2019. 2020 operating margins climbed to 9.9% compared to 2019 operating margins of 5.7%. 2020 periodic pension costs were approximately $1 million compared to a profit of $2 million in 2019. Interest expense was $2 million for the year compared to $4.4 million in 2019 and our effective tax rate for 2020 was 20.3% compared to 21.1% a year ago. Overall, net income for the year grew by 240% to $41 million compared to $12.1 million a year ago. Diluted earnings per share improved by 235.4% to $2.65 per share compared to $0.79 per share last year. Now for a few balance sheet highlights, we continue to prudently manage our cash flow, and at December 31, 2020, we had cash and cash equivalents of $5.2 million. This is a decrease of $3.8 million since last year. During 2020, our excess cash from operating activities was used to repay outstanding borrowings on our revolving credit facility. We recently announced our quarterly dividend of $0.10 per share, which was paid to shareholders on February 26, 2021. In total, we returned $6.1 million in cash dividends to our shareholders during 2020. CapEx investments for the year increased by $2.2 million to $11.9 million compared to $9.7 million a year ago. We anticipate continued heavy investing in our automation projects this year, and we expect CapEx expenditures to be in the range of $15 to $17 million for 2021. Our fourth quarter and full year results reflect the team's superb agility in navigating a very challenging environment while executing our strategy for long-term profitable growth. I'll now turn the call back to Michael for his closing remarks and a general outlook for 2021.

Thanks, Andy. Our performance in 2020 can only be described as epic, as a result of the tremendous gains we achieved in all segments of our business. We reached several milestones in the midst of a global crisis that impacted nearly every facet of our lives, and we excelled in ways that will be sustainable for the long-term. The year highlighted our core competencies in delivering products and services to essential and non-essential businesses. At BAMKO, we differentiated ourselves across traditional promotional products by showing our sourcing agility to pivot to PPE. At TOG, we provided critical support to our customers during a pandemic, and to do so from home in an emerging storm was nothing short of a miracle. As we look ahead, we're excited about the efficiency and the agility that we continue to display as a company. Let me recap some initiatives that we're excited about that we haven't greatly covered so far in this call. We hope that you saw SanMar's recent press release announcing their new custom WonderWink offering, gaining access to their customer base of over 21,000 companies with hundreds of thousands of feet on the ground, selling our special design products via this very important B2B channel. It's a terrific win for CID. The realignment of our design and product development teams and our uniforms segment was timely. And we will be augmenting those teams with even more talent as we forge ahead to take more market share. As Andy mentioned, our third facility in Haiti will considerably increase our near-shore production capabilities. As a matter of fact, in 2020, our own factories in Haiti manufactured 13% of our total uniform production. All factories in Haiti, including our contract factories, currently manufacture about 25% of all of our units. All of this is done in the duty-free environment. This will grow in each case by approximately 50% this year, so that our own factories will be manufacturing more than 20%, and overall contractors, the numbers should exceed 35% of our total units. As each quarter goes on, this will result in improvement in gross margins in our uniform business, as well as our ability to better service our customers from a near-shore location. M&A activity, which we haven't covered yet, is robust. Our ultimate mission with each prospect is to find the right fit, as that in the last call, and I’ll keep repeating it. As a reminder, we're being extremely discerning in pursuing opportunities that are quickly accretive, highly synergistic, have short integration periods and have the ability to bring smart, seasoned leadership that will integrate into our corporate culture. BAMKO joining forces with Gifts By Design, as Jake spoke about, is a great example of that and is a win-win partnership that sets our quest for substantial opportunities ahead. We welcome their team to the SGC family. Additionally, BAMKO will be investing in a new warehouse management system, which we implemented in its Oak Grove, Louisiana warehouse in the coming weeks. We also leased a 200,000 square foot building, which is being constructed right now in Arkansas to handle all receiving, which will also serve as a replenishment warehouse for our current uniform and promotional segments to handle future growth. We are excited about the installation of an even more efficient semi-robotic warehouse management system in our main Arkansas facility, which is on pace for completion later this year. As Andy spoke about, we're wrapping up the implementation of robots at our Dallas facility as planned. Since these robots operate with a certain amount of AI and machine learning, we expect their efficiency to gather steam over the coming months, helping to reduce our costs and provide better service to our customers. We're constantly evaluating our channel strategies. We're making a lot of progress in the e-commerce space to support our retailers’ platforms, both online and brick and mortar, particularly in group sales. The rollout of Phase One of our group sales strategy will be completed this month with Phase Two plan for later this year. Giving our retail customers transparent visibility to their group customers down to each employee in the group is something that has not been achieved in the past. We're excited to bring this new technology to what is known as the group sales business. We do expect to spend higher marketing dollars in the future to improve brand awareness through many digital campaigns, which will partner with many of our retailers to achieve. We continue to bolster our management ranks. Having gone from 3,200 people to 4,600 associates this year to support our growth. More is needed to take us to the next level. Please note that we are growing at a faster rate in each of our businesses than the industries themselves are growing. As we increase our market share, we must have talent to take us to new record levels. We're also proud, in case you missed it, to be listed as number 10 of America's Best Small Companies by Forbes magazine, much of this recognizes shareholder return and our financial operating results. We're also proud of our many award-winning teams across our brand-building enterprise. Throughout our 100-year history, we've continuously cared for our team members, served our customers, and supported the communities in which we live and work. Our proven resilience and ability to excel during challenges is one of our organization's greatest attributes. We built this company to endure. We find ourselves in a commanding position as we enter our 101st year of business. With that, we'd like to open the call for your questions.

We will now begin the question-and-answer session. And the first question comes from Kevin Steinke with Barrington Research. Please go ahead.

Good afternoon, everyone. I wanted to start off by asking about CID. And I know you touched on this on your call last quarter, but you again talked about the international growth strategy and opportunity there. Maybe could you just talk about the market dynamics in Europe and internationally compared to what you see in the U.S. for CID similarities, differences, and why now it feels like it's a good time to move internationally with CID.

CID has been involved in international sales even before we acquired the company in 2018, initially on a small scale mainly in South America, with some activity in Europe and Australia. Over time, these sales have grown with minimal marketing effort on our part. There is clear demand for fashion scrub products in these markets. While scrubs may not have always been widely adopted, today healthcare workers globally are wearing them and are increasingly interested in fashion scrubs. It's important to note that healthcare professionals are in short supply worldwide, typically earning more than their peers, which allows them to afford these products. Even in cases where hospitals provide scrubs, nurses often take them home to launder, depending on local customs. The landscape varies significantly from country to country, but we've noticed a consistent demand across Europe for our CID WonderWink products, often reaching nearly every country through various retailers or brokers, sometimes involving intermediaries. The primary obstacle to further growth has been the lack of product availability in Europe. Having products stored on the ground in Europe would facilitate easy shipping across borders, as there are no duties within the region. In contrast, shipping goods from Texas to Europe or South America complicates pricing due to duties already paid in the U.S. Although it's possible to recover some duties when products are shipped overseas, logistics for transporting smaller containers can be quite costly. To streamline our operations, we've decided to use a third-party location in Poland, which is strategically located for distributing to our target countries. This initiative has progressed beyond trial stages, signifying our strong commitment to the European market. Last year, we engaged consultants to guide us in making informed decisions, leveraging their experience in helping other companies expand in Europe. We believe our WonderWink product stands out due to its excellent fabrics and stylish design; it's not exclusively American but is universally appealing to caregivers across the globe. We're entering this market not just because the product is exceptional, but because we can, and we aim to capture market share that our competitors have already taken steps to secure.

Okay. Yes. That's helpful. Do you think your competitors, who've already moved into Europe, do they have that same kind of differentiation in terms of the fashion, fit, comfort, etc., that the CID products bring or do you kind of feel like you have some differentiation or first-mover advantage from that perspective?

No. I think we had – I think they have the same advantage that we have. I mean, these are the same people we compete with in the United States. Many of them are great companies who do a good job who we're constantly trying to outdo each other from a product standpoint. Except for the Indie Line, which is totally unique, except for some of the channels we might sell through that they don't. Our product certainly isn't the same. We do everything we can to see that our product is unique or else why would somebody buy it in a shop or online. So, I think we're – it's a level playing field. I don't think they have a terrific advantage over us except getting there first. And quite frankly, some of these companies have been in business 20 years and started in the United States first too. CID took a lot of market share from them in the United States. We intend to do the same thing in Europe.

Okay, great. And then you referenced your new partnership or I guess it's the WonderWink partnership with SanMar Corporation. It seems like this is the channel you're excited about. So, can you just talk a little bit more about that and are there similar types of opportunities in the pipeline that you see?

There are – we're constantly working to become as omni-channel as we can while continuing to support our retail base of customers. And so, SanMar was a big win for us. We’ve been working on that for a long time in collaboration with them, making sure we had the right products. So, they could take big inventory positions to be able to service what is essentially the entire United States and 21,000 plus competitors. And those competitors, you understand, are mostly promotional product companies who might sell into doctors' practices and dental practices and so on. That actually competes with BAMKO, interestingly. The lines are pretty blurry between all these companies in terms of who's the supplier and who's not, but SanMar is probably – it's the most highly regarded customer servicing in that industry with apparel. And they have a very multi-catalog that essentially probably 20 – probably a 100,000 salespeople in the United States walk into their customers with, to show them different apparel. And now, there'll be some pages allocated to scrub apparel in our apparel. So, they made the announcement to their sales force back in December; they did a press release last month. We're very excited about it. It opens up a whole new world for us. We have multi-year commitments from them. We think it's going to – it's going to turn into something. Quite frankly, we believe it's additive to what we're already doing. We believe in the end, it will support all of – all the efforts that we're putting into our marketing, and we'll help support them as well. But no, it's an exciting channel for us and they're smart business people, and they made the right choice choosing us to be their partner.

Okay, fantastic. I'm just trying to put some pieces together here. So it's interesting to talk about SanMar and then the international expansion for CID. And then as you mentioned the WonderWink moving into the laundry channel, I saw the announcement that you referenced there. It's public information UniFirst had that press release out about their partnership with WonderWink. But frankly, I'm interested in talking about all this or more about this because I had a little bit of pushback from investors at post your last call, thinking that 12% organic growth target you put out there for uniforms seemed aggressive. But it sounds like these types of opportunities or new channel partners, etc., that you're adding are really, is what's going to kind of build up to that ability to grow 12%. So any more color on that or what – how you kind of build up to that targeted growth rates that you put out there?

Sure. Well, we felt pretty confident in a lot of these opportunities on the last earnings call, and our growth projections took that into account, although the announcements hadn't been made yet. So yes, this has been taken into account in our last growth projections, both of those opportunities as well as our larger entree into the rest of the world, particularly Europe. We were very excited about it. I hope we can come to future earnings calls and give better guidance. But for that, we feel very comfortable with the guidance we've given. And we tend to be conservative in nature. People know that about us. We wouldn't put out a 12% growth number unless we felt pretty confident about it. I think you could see that we've usually exceeded expectations of the market over the last few years. So we hope to continue to do that.

Great. That's helpful. You did mention briefly there some later RFP activity on the HPI side of the uniform business, can you just clarify, was that for the non-essential customer set? Or was that just kind of across the board and maybe a little more of what's going on there? I know you said, you expected it to pick up but can just give more color on that.

Sure. The essential side of the business is so busy right now. They're not even – they're not worried; they're just buying uniforms. And we've seen some extension of some contracts, very happy to get those extensions, rather than going through all kinds of redesigns right now. We're not seeing the essential side doing a tremendous amount of RFP activity right now. I think they're focused on different aspects of the business of trying to service their customers and trying to get reconfirmed themselves whether it's – even some of the non-essential side, I mean, what we see in quick service restaurants for instance, is they're all trying to figure out how to make their takeout more efficient and how to make their, when you pull up to a window, drive through more efficient and how to scale their business so they can make better use of the large space they have that nobody's eating inside. So it's kind of a funny time where we're just not seeing the RFP activity. It's not out there. I'm not saying it's not out there at all. It's just out there to a much lesser degree. I think a lot of companies, especially on the non-essential side, have been worried about survival, thankful for what they got in PPP money but still trying to figure out what they're going to be when this is all over. And first of mind is not – the front of mind is not uniforms. It's fine. We have uniform programs with them. We will likely get extensions of contracts beyond the initial periods that we're in, or some cases in the 10 extension of some contracts. And that's fine with us. I'd rather we have customers recommitting for a few more years that we're already doing business with than chase customers who won't see any business probably for the next one and a half or two years in the normal cycle. So we do expect that as more people get vaccinated, as more people are allowed to come back to businesses, to restaurants, and people start shopping again in malls and so on, things get a little bit back to normal, maybe never what they were, but more back to normal that we will see RFP activity. We've seen when we come out of recession in this country in the past, an incredible lift in marketing dollars spent, and that benefits BAMKO for sure. And they've seen the same thing and that has benefited us in the past. We came out of the recession in 2009 and I mean, you could see our numbers. I spoke to them actually in my script here today. A lot of people were spending marketing dollars, and one of the things they wanted to do was rebrand. We expect when we come out of this, it'll be quite robust, maybe more robust than ever. We've never – even a recession has never impacted a country the way this pandemic has. So we expect people to want to give their employees a lift, want their customers to view them differently; it’s try to rebrand themselves, it all fits together. But it is somewhat the way. I'm not worried about it. Because as long as the pandemic continues, even at a diminishing level, we're going to continue to sell the essential businesses what they need and a modicum of PPE as well. So nothing has changed with respect to our guidance that we gave with our uniform business for this year and our overall business for this year.

Okay, fantastic. I guess, I wanted to move on to BAMKO. And you spoke about the 11% growth in traditional promo products in 2020 while the industry is down 25% to 30%. You mentioned BAMKO being less event-based. Maybe more color on what’s allowing you to outperform the industry so significantly. Is it just your overall financial strength, your ability to customize supply chain? I guess, it’d probably be a little bit of everything. But just maybe speak to that more in terms of the traditional promo products and the overall strength there.

I’ll let Jake respond. Jake, you’re on the call and Jake runs our Sales and Operations and CFO of BAMKO. The Jake of all trades, so go ahead, Jake.

Thank you again, Kevin. So I think when you look at our industry and the Promotional Products segment, there’s 21,000 companies, many of which are really small and struggle through something like COVID. I mentioned it before: down 30% in 2020 over the prior year. I mean, the truth is we're able to capitalize on opportunities that our competitors can’t do. We pivot quicker, we're more diversified in our supply base, and a lot of our competitors have been held up by PPP loans, some minor PPE sales. When those dry up, they may not be around and we’re there to pick up the pieces. We've been very successful. 80% of the PPE we sold went to non-customers and now we've converted 30% of them to promo customers. We continue to work with these customers to find additional opportunities to penetrate and get their Promotional Product business. So we’re seeing the ability to do that. And it all stems from being agile, having boots on the ground, forward-thinking, and being ahead of the rest of the industry. And we were like, we’re positioned going forward here for 2021 and beyond.

Great. Also with regards to BAMKO, you spoke particularly about employee gifting being a benefit to growth in the fourth quarter and made their gifts by Gifts By Design. So what’s the trend you’re seeing there? What’s attractive about that particular niche that you saw growth in and that you’re investing in through this recent acquisition?

Yes. We’ve always done employee gifting throughout our history at BAMKO. We’ve always done at-home gifting or in-office gifting, acquisition programs for customers. It just wasn’t a core focus and it was something we did when customers would ask, hey, make us an employee retention program that speaks to our employee base. We do it. But this makes us substantially stronger on the employee and customer engagement side of the business. Gifts By Design works with a huge customer base of blue-chip companies that we didn’t have access to before, and the ability to sell into these customers and kind of know the speak and be able to walk the walk and talk the talk about employee gifting and customer engagement programs. And we don’t expect this to go away quickly, right? None of us really know what happens with the work-at-home model going forward. But what we do know is that a substantial portion of employees are going to continue to work at home post-pandemic, and we want to be there to capitalize on that. And we have shipped more at-home or direct-to-home gifts probably in the month of December than we did in all of 2019 combined; it’s phenomenal. The need and desire for this to connect with employees. And as Michael said, coming out of pandemic, coming out of a recession, you kind of want to do that more and more. They got to keep employees, they want to connect to them, they want to keep their people engaged.

Well, that’s really interesting. Okay, great. Okay. So you mentioned M&A activity is robust. You mentioned that the recent shelf registration, so are you seeing larger acquisition opportunities in the pipeline that would necessitate perhaps raising capital, or is this to be prepared on all fronts? What’s the size of the opportunities you’re seeing in the pipeline? I guess, I’m putting a lot in there, but I just want to get more perspective on the robust nature of the M&A pipeline and the size of candidates you’re seeing.

There are a lot of companies for sale. There are a lot of companies for sale in all markets. During the pandemic, we’ve had a chance to look at many and quite frankly, some of them were in such trouble that it really wasn’t interesting to us. Some of them, the only profit they made was – or the only way they were able to keep their business even open to sell it wasn’t because they received PPP money. There are all sizes out there, Kevin. I’d say, ranging from probably – we don’t look that low. We tend to draw kind of a line in the sand at about $10 million. Even that’s a little bit small for us unless it brings to us something from a standpoint of something it does that we don’t currently do or has really great people that we can bring into our organization to help them grow the entire business, all the way up to $100 million. There aren’t that many $100 million promo companies, quite frankly, there aren’t that many $100 million uniform companies, but there are few. Some of them have gotten in trouble. Some of them are just stead up; this pandemic has taken a toll on people. We’re lucky; we’ve been energized and we’ve moved forward and the group has done an incredible job. Probably, we’ve never worked harder and it’s never been more fun doing it. During the time when it was, from a family standpoint, it was most devastating for everybody. We think we’re in a unique position with all of our systems in place now with most of our – well, all of our integrations done. We’re expanding our warehouses, but our integrations are done to be a great platform in each of our businesses: medicals, the call center business. The call center business is a pretty small business to begin with, so maybe their threshold is something under $10 million. But we have looked at businesses and we’ll continue to look at businesses that we feel add value or get us into a space that we’re not currently.

Okay. No, that’s helpful. This is just a little more of a numbers question here, but on the last call you had mentioned that maybe CapEx would be a little lower than you thought in 2020, around $8 million, and you came in close to the $12 million mark. So did you just have some catch up there or timing-wise, were you able to accelerate things a little more? I know you’re looking for a ramp up next year, but maybe just talk a little bit more about CapEx this year and next.

Yes, Kevin. I mean, there were a couple of things that we ended up adding in late in the year. Michael mentioned the third facility in Haiti, with getting ready on down what essentially is a prepaid lease but does run through capital expenditures. We also invested in the robotics in Dallas, which based on the very quick payback we get from that, it was a project that we brought to us and made sense to add in. And earlier in the year, we really did take a very cautious perspective on CapEx and slowed things down a little bit. But that was all really pre our very successful pivot to PPE. And we really saw it as an opportunity to get a head start on some things that will have very nice paybacks for us going forward.

Okay, great. And lastly, I just want to ask about – Michael, you were talking a bit about the – at the end there about just bringing in new management and talent as you really scale up here and the business is really ramping up. What’s the environment like for finding good management and talent? I know we’re still in a labor market recession, but are you seeing a healthy pipeline from that perspective as well? Because I know that’s an important aspect of a business that’s maybe not talked about as much. So any thoughts there would be helpful?

Yes. We’ve already doubled, more than doubled our recruiting department. Yes. The greatest thing is, it’s a recruiting-rich environment today because a lot of the paradigms of yesterday that somebody had to live near the office because they were going to come in the office every single day are gone. We know that we can continue to work from home. We know that we do want people in our offices, but they don’t need to be there every day. Some people don’t need to be there at all. Where teams need to collaborate like design and product development or marketing and design, yes, they need some time together in the office, but they don’t need all their time together in the office. That opens up a pretty rich target environment for us: people who, first of all, our reputation at BAMKO and in our uniform business is very, very strong. So if somebody comes out of the promotional business or comes out of the uniform business or even out of the apparel business, or even out of the supply side of the promotional business, those are great candidates for us. If I’m looking for somebody in project management, they don’t have to be in Seminole, Florida, or Cattell Texas. They can be anywhere. They can be anywhere in the U.S. and quite frankly, a lot of them can be anywhere in the world. That goes proven that model over the years with their India and China office as we have it in El Salvador. What we want is the best talent we can find anywhere to work for us. Quite frankly, a lot of those people don’t have the opportunities locally, wherever they may live, would be very happy to come work for us. So we think it’s a target. A lot of people are employed right now. Great people usually aren’t unemployed very long. So we’re going to have to go out and actively recruit great people. But they’re out there and we think we got an awful lot to sell when we’re pitching them in our company.

Okay. Thanks. And congratulations on great results in 2020 in such a difficult environment, and also congratulations on your 100 years of business.

Yes. Kevin, I do want to clarify one thing, just so everybody understands when Michael talks about our guidance and nothing having changed. In the third quarter, the guidance we’ve given was that we expected 2021 to be about $450 million based on what we had in PPE orders that we already knew of at that point; we really were giving the base business. As Michael mentioned earlier, we are continuing to book a fairly significant PPE business as we go forward. When he said nothing had changed, I did want to clarify the part about that with the acquisition of Gifts By Design, that was not something that we had contemplated into that $450 million number. So that would be added to that number, but then going forward, it would be within the organic growth comparable rates to what we’ve got across the rest of the form of business.

Okay. So the base is still $450 million and just layering on Gifts By Design. How sizeable is that roughly?

It’s about a $1.5 million run rate per month.

Okay. And we’re still using the $450 million as the floor, plus the Gifts By Design. Okay.

Plus Gifts By Design, plus additional PPE as we book it. I mean, we’re contemplating what we knew about at that point. We really can’t gauge how long the pandemic and the demand for that crisis PPE is going to last. So we wanted to give a realistic basis without that, and that’s all added to it.

Okay. Got it. All right. Thanks.

Okay. Thank you very much. All right.

And it looks like we have no further questions. So this concludes our question-and-answer session. I would now like to turn the conference back over to Michael Benstock for any closing remarks.

Well, thank you all for joining us today. It’s always great to be with you and report great results. We hope we look forward to reporting strong operating results in Q1. See you then.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.